‘Govt. begging Exxon for crumbs’

Oct 06, 2025 News

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…as demands US$1.2M from Exxon to conduct audit
…Chris Ram says vague language in licence for 7th project may indicate amendment to PSA

(Kaieteur News) – The Government of Guyana (GoG) in the Production Licence (PL) for the seventh project- Hammerhead- has required ExxonMobil to pay an additional US$1.2M, an arrangement which may amount to an amendment of the 2016 oil contract.

This is according to prominent Attorney-at-Law and Chartered Accountant, Christopher Ram. In an invited comment, the Lawyer noted that the Hammerhead Licence requires ExxonMobil to pay US$400,000 a year for three years—a total of US $1.2 million—under Clause (gg)(ii), which provides that the sum be paid into a government account “to be used by the Government for the preparation of the audit scope and the procurement of third-party auditors to supplement the Minister’s resources and develop institutional capacity for the ongoing conduct of audits.”

Ram said it was unclear whether the independent audit referred to is the same as the Ministerial audit under Article 23 of the 2016 Petroleum Agreement and 1.5 of Annex C thereto (Audit and Inspection Rights of Government), the cost of which is “at [the] Minister’s sole cost and expense”.

To this end, the lawyer pointed out, “If it is the same audit, the clause amounts to an implied or de facto amendment of the Agreement – something that, under Article 31.2, can only be done “by mutual consent in writing”–not in a licence but by way of an Addendum to the Agreement for which there is a precedent.”

Ram believes that if the Licence is not an amendment to existing contract, then it signals greater trouble for Guyanese. According to him, “Worse yet, if it is not (an amendment) it means that if the Government begs Exxon for crumbs, it would be prepared to use a licence to show its generosity.”

He reminded the GoG that Article 31.2 of the Agreement makes provision for either party to lawfully request an amendment or modification of the wider Agreement – without any conditions or limitations. “Meaningful negotiations must then take place. Neither party can refuse to make reasonable efforts towards an amicable resolution,” Ram added.

On Sunday, Minister of Natural Resources, Vickram Bharrat said that the provision in the Licence is for “continuous auditing”. In response Ram said he failed to definitively say whether the monies will finance the cost oil audits, required under the PSA. Further, the advocate argued that the vague language in the Licence is more evidence of the absence of seriousness with which the Petroleum Agreement and its derivatives are dealt with.

He said, “But the Government refuses to set up a Petroleum Commission as it has promised to because it is satisfied with crumbs over seeking an amendment or modification. Its feeble excuse: “sanctity of contract”.

On Saturday, this newspaper reported that the administration inserted a provision into the Licence which will require the company to pay an additional US$1.2 million for the conduct of audits, although it has often made it clear that it is prohibited from increasing the financial burdens of ExxonMobil and can therefore not seek a renegotiation of the lopsided oil deal, or any additional benefits for citizens.

Minister Bharrat has since clarified that the sum is not cost recoverable. Stakeholders have often argued that government can capitalise on these licenses when approving more projects, to seek additional revenue for the people of Guyana.

Government officials have however been reluctant, insisting that the financial burdens of the contractor cannot be increased, in keeping with the terms of the 2016 Production Sharing Agreement (PSA).

The Stability Clause of contract states at 32.2, “After the signing of this Agreement and in conformance with Article 15, the Government shall not increase the economic burdens of Contractor under this Agreement by applying to this Agreement or the operations conducted thereunder any increase of or any new petroleum related fiscal obligation, including, but not limited to, any new taxes whatsoever, any new royalty, duties, fees, charges, value-added tax (VAT) or other imposts.”

Meanwhile, 32.3 of the agreement goes on to point out that should there be any change in the laws which causes an adverse effect on the contractor’s economic benefits, “the Government shall promptly take any and all affirmative actions to restore the lost or impaired economic benefits to Contractor, so that Contractor receives the same economic benefit under the Agreement that it would have received prior to the change in law or its interpretation, application, or implementation.” Be that as it may, Exxon has agreed to pay the additional revenue over to the state, raising doubts about the “sanctity of contract” and government’s refusal to seek more financial benefits from its resources.

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• Amendment, Audit, Bharrat, cost recoverable, crumbs, Exxon, Hammerhead, PSA, Ram

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